Generation Challenge in Retail
Thinking the Future
Whatever retailer we are talking about, there is no permanent strategy towards captivating our clients. The same way Fashion Brands change their collections every Season, color trends change several times a year, new cuts and fittings are introduced monthly and restaurant chains adapt their menu to regional client taste, communication strategy and marketing tools need to adapt to social and geo-political developments, as well as population trends (migrations and aging being the main topics).
That said, looking to the future is a permanent task for all retailers and starting the adaptation as soon as possible is what separates the winners from the followers. That is why, forecasting how our client profile will be in 5 or 10 years is so important, and understanding that in 2025 the Population scheme will be well defined, is a Key success factor that we should all embrace from today onwards.
Over 50% of our target clients by 2025 will be either Over 60’s or Millennials and taking into account that those will be the parents and grand-parents of the children by that time, make them an even greater Audience and so much more important.
Below we try to describe these groups by explaining how they grew up and what makes them so special. We do believe that all retailers should look at this as the base for the way they build all their communication strategy, as well as their product planning and product range adjustments.
The Over 60’s
According to the UN, by 2025, the more developed regions will face a serious population aging problem. Close to 30% of its population will be over 60 years old. However, companies still spend over 95% of their Marketing and advertisement budgets targeting the under 50’s. It is a characteristic that spreads around almost the entire market (from Retail to Industrial companies).
Besides its weight in terms of potential target audience (% of the Total Population), the characteristics of these clients are changing all over the world, turning the ‘Over 60’s’ into some of the most wanted customers for those who actually pay attention to what these data tells them.
According to the Senioragency International (referred in The Economist article listed in the sources), the Over 60’s are not only getting Healthier, benefiting from increased sports activity, healthier food patterns and Medical Advances, but also getting wealthier.
All of these conditions result in more years of retirement, with more free time, increased financial comfort and a self-indulgence mentality that changes the paradigm of retirement. Nowadays marketeers are getting younger each day, with an increased focus on Social Media platforms and new digital content creators. We obviously cannot neglect the importance of these channels, and that’s not the point of this reflection from our side. However, we need to understand that, 30% of our potential client group has an increased amount of free time, financial resources and disposition to spend in our products and this group is, for instance, the largest part of TV-share in the entire population, spending 30 to 40% more time in front of the TV than the rest (according to The Economist article listed in the source).
The Millennials (Born between 1988 & 2000) are one of the most complex target groups to understand. But besides all that, according to recent statistics (Populationpyramid.net) and taking Europe as a representation of the ore developed regions of the World, they will represent more than 25% of the potential clients by 2025.
They have gone through main events in the late 80’s (climax of the US war on Drugs, Fall of the Berlin Wall, Tiananmen Square protests) that, even though their early age prevent them from fully understand it, shaped their basic concepts of Freedom in every sense of the word.
Also during the 90’s, the entire World changed in a much faster way than ever before. The great technological revolution of the Internet, making everything and every information available instantaneously for everyone and generalizing the true concept of Globalization, made the Millennials feel like if they belonged to the World and bringing down any barrier that may have existed before. New sorts of consumption cultures started getting shape and re-built the way the Millennials faced competition, accessibility and affordability through peer-to-peer networks and the beginnings of E-commerce.
Besides that, all sorts of new Businesses and Business concepts were created during this Freedom and Globalization rush, like sharing economy (Airbnb, Uber, etc.) and new devices and platforms (Smartphone).
It is also extremely important to notice that, key geo-political events happened during their teenager years, where most of us develop our sense of social justice and define our action patterns as adults, like the 9/11, Afghan and Iraq war, Climate Change awareness groups, the financial collapse of 2008/09 and the Arab Spring.
All of these landmarks of character building, moulded one of the hardest generations to understand in the current landscape of clients. It has been a true challenge for all Marketeers out there to find the perfect way to reach all the Millennials, and the problem maybe exactly that… Trying to reach them all! Millennials attention can be driven by focusing on 3 Key Values:
We need to understand, and target our communication towards Millennials, the basic assumption that they are moved by the idea that they are global citizens living in a World with no boundaries, no barriers, no differences, more respect and freedom. They live their life assuming that all their decisions, their actions and their fights have a Higher Reason or Purpose behind it.
CEO & Co-founder - EXPEGY
Mckinsey Global Fashion Index 2016